UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next
Author: drach Old School Fool Motley Fool One Everlasting Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 62  
Subject: How does my covered call work? Date: 3/20/2009 6:43 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
With impeccable timing, I sold 50 covered call contracts (Mar 09 $5) for JAVA on Tuesday Mar 17. The underlying stock shot up the next day, but nobody exercised the option. I suppose they just traded it for a quick $18K profit. The market is now closed, but as far as I can tell, nobody has exercised the options. They seem to expire on Sat (is that right, on a non-trading day?). I think I read somewhere that ETrade automatically exercises the options on the expiration date, but I'm not sure.

So, what happens now? Do they in fact get automatically exercised tomorrow? Will the stock just "disappear" from my account? Is there any way I can stop that? What if the option owner doesn't want to exercise? Can he stop it?
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next

Announcements

Post of the Day:
Value Hounds

Not Cheering the Shire Deal
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement